GPSSA Outlines Pathway for Enhanced Pension Benefits Through Additional Service Years
The General Pension and Social Security Authority has clarified the provisions enabling insured individuals to augment their recognised contribution period, thereby potentially elevating their pension entitlements.
The General Pension and Social Security Authority has elucidated the mechanisms by which insured individuals may enhance their pension value through the acquisition of additional service years. This provision permits contributors to extend their recognised contribution period, thereby potentially increasing the quantum of their retirement benefits.
Eligibility criteria are differentiated according to the governing pension legislation. Those operating under the Pension and Social Security Law of 1999 may proceed with applications upon completing twenty years of service. Conversely, individuals subject to the Pension and Social Security Law of 2023 may apply either after completing twenty-five years of service, or upon completing fifteen years of service and attaining the age of sixty.
The 2023 legislation applies to Emirati citizens who joined the workforce for the first time on or after 31st October 2023 with an employer registered under GPSSA. Those previously covered by the 1999 Law remain subject to its provisions, including upon transferring to a new employer.
The scope of permissible purchases differs according to the applicable law. Under the 1999 legislation, men may purchase up to five additional years whilst women may acquire up to ten years. The 2023 Law permits both men and women to purchase up to five years. Contributors retain discretion in selecting the number of years to purchase, which need not constitute the full available entitlement.
A significant constraint exists in that the total recognised service period cannot exceed thirty-five years, at which juncture the pension reaches its maximum rate. Consequently, an individual with thirty-three years of service may purchase a maximum of two additional years.
The cost calculation employs the contribution account salary at the date of application submission, multiplied by the applicable contribution rate and the number of months being purchased. The operative rates are twenty percent for those covered by the 1999 Law and twenty-six percent for those subject to the 2023 Law.
Payment arrangements offer considerable flexibility, permitting either complete settlement or payment by monthly instalments, with fifty percent payable immediately upon approval. The outstanding balance must be discharged within four years, prior to the individual attaining sixty years of age or the conclusion of their service, whichever occurs first. Each monthly instalment must constitute no less than twenty-five percent of the contribution account salary.
Applicants must maintain active employment status at the time of application submission. Should employment terminate before payment completion, the additional service period shall be proportionately adjusted. In the event of death, outstanding instalments shall be deducted from the pensions of eligible beneficiaries in accordance with prevailing legislation.
The Authority recommends that interested individuals ascertain which pension law governs their circumstances, evaluate the anticipated pension implications, and consult the comprehensive service guidance available on GPSSA’s digital platform prior to initiating an application.
Source: WAM